Groupon! = Instant Customer Base Overnight

Marketing
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So over this past Thanksgiving dinner with my girlfriend and her new college friends I got to talking with one of them about how I just moved to Portland, OR, started my own window cleaning business, had gotten a few clients from my uncle’s carpet cleaning rolodex and was looking for a boost in clients. Her friend, from California, recommended Groupon: it targets qualified customers, you get great exposure, and get money upfront.

One Week Later: Submitted my company’s profile and services to Groupon.
One Week + 2 days later: Got a call from Alex from Groupon, says my business sells well.
One Month Later: Had Deal, Pricing, and Details organized.
Two Months Later (January 25th, 2011): VuRenu was featured and went from 12 customers to 240! and fielded about 50 phone calls, was glued to my email answering questions like, “do you come to my city? how much for a window? what is a window?”
Two Months + 1 Day later: Learned Real quick how to schedule estimates, appointments, and not let handling customers ruin my sleep (cuz scheduling was the only thing running through my mind at night!)

How does Groupon work?
Usually they offer something for 50% savings. In my case, “$100 of service for $49!” So on the day of the feature the Groupon Customer receives an email telling them they have 1 day to buy this “Groupon.” They buy it at $49. Groupon then splits that money with you 50/50 (They got $25, I got $24).

The risk:
The dollars are right there: For every Groupon I sold I “lost” $76. I sold 218 Groupons. I made $5,232 and will give out $15,696 in services for “free”. Some customers just want “$100” of service. That sucks, but you suck up to them, give them a little bit more of your time and throw in a few “freebies” = clean an extra skylight, wash 2 more mirrors, etc. They’ll keep you in mind for their next services. Yes, you do stand a chance that some customers are only looking for deals and know the next time they want this service they’ll just wait for another Groupon, hence may not “build” a base.

The upside:
UPSELLING!!! Yes, I started out as just a window cleaner. Groupon asked, “Do you do gutters, too? Cuz that really sells.” Not wanting to miss an opportunity, I said, “Heck yes!” Learning on the job is a beautiful thing. I’ve also added pressure washing to the mix and am just an arsenal of opportunity. FYI, I have experience in Gutters and Pressure Washing, so no, I’m not just a fool out there.

I went from making $1,100 a month to $1,100 my first week!

And even if everyone wants just the “basic” $100 of service (which they don’t) I stand to make more than what I’ve been doing since I’ve started.

Would I recommend Groupon?
Only if you can handle it. I’ve never had a “disgruntled customer” before. Now, I know what that feels like. I’ve declined services right in their face and said with a smile, “You can just go to Groupon.com and they’ll refund your $49 no questions asked.” And I’ve even overbooked myself to the point where I’ve missed an estimate…twice :(. I was so embarrassed. That will never happen again. It’s well worth the “risk”.

If Groupon isn’t in your area, LivingSocial is the same concept.

Has anyone else out there tried this?

1 Like
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Gi back to the home page, scroll down, and you’ll notice a thread chock full of Groupon horror stories

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Thanks for the direction. I did go back and read those posts and obviously it’s not for everybody. I’ve done 20 jobs in the past 10 days and only 3 of the 20 wanted “just the value of the Groupon.” From the other 17 I had made $1825 after the Groupon, so including the $24 per Groupon, that’s $2260 in my pocket. When you setup your Groupon it’s all about the Pricing. They have to hit their price point. I wanted to go “$80 of service for $40” but they shot that idea down…

If anything, the Groupons expire in 6 months and the experiment will be over. But like I said, I had 15 houses in 2.5 months last year, it just feels good to be busy :slight_smile:

I’m just looking forward to the 29 unit condo talks being negotiated now :wink:

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Good for you man, well played with the strategic pricing (manipulation).

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What are these people expecting for their $49 bucks?

Its hard for me to believe that any of these people would stay true to their cleaner after the initial cleaning. I am guessing they are just going to go with the cheapest guy, every time.

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$76 paid for each new “customer” sounds expensive, especially considering the possibility that the majority might only be seeking one-time deals.

What other marketing ate you trying?

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so you do a $100 job for $25 just for the sake of getting a job lead? that job lead cost you $75 if my math is right. plus gas to get there. you could buy 1000 flyers for $75

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I have read both threads and have been interested in this because my company is going to be on groupon the last week of feburary. From what I have got from all the post here and other places it seems groupon is good and bad. If you are established and have a steady coustomer base why would you offer your services for cheap, you would not. So for companys of that size that have work every week grouppon would be a horrible choice. But for companys like mine and the gentelman starting this thread our clientell is not paying the morgage so we need to do whatever we can to get more. With the deal I made with groupon worst case I will be making around $10 an hour to be out window washing. That is terrible, I know. But looking at long term am I better off going and making that 10 or making nothing that day. Once I have enough work I will not goto groupon again but for a new bussiness with more time then $ I think it can be a good thing.

If nothing else my bussiness name will be in the e-mail boxes of 20,000 homes. Even if they do not buy the groupon that day that still gets my company name in there head. 3-4 months down the road they look in the phone book looking for a service like mine and they may think ya ive heard of this guy…

at least thats my 2 cents

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i think you are better off investing that time on something else

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Yeah your be in their heads alright for being dirt cheap and not even $10 by the time you pay gas

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I did it and then realized I was going to lose my butt so I called and canceled!!!

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I think Chris and Alex ran a deal on gutter cleaning. I don’t recall getting any feed back from them on how it went or if they would do it again. I crunched the numbers on doing a window deal or gutter deal and they just don’t look very appealing. With that said, I do not see us ever doing a deal with Groupon in the near future.

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$10 hr after expences, if noone upgrades thats the worst I will do. And groupon coustomer do not see the companys advertising there as dirt cheap cpmpanys, some very upscale resturants, national companys and such advertise on there. Mailbox flyers, news pappers and craigs list are where they go for dirt cheap. Ty for your imput though.

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I think as a “new” company this would be amazing! Talk about a rocket ship start. As far as a company just in growth mode, I am still on the fence.

  • When do you get your moola from groupon?
  • What did you set your gropon limit at? What i mean is the amount of people that HAD to sign up to get the deal?

Wouldn’t you be able to put down in the restrictions For use towards a interior and exterior cleaning?

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I signed up for Groupon and was about to be featured. However when they asked for proof of pricing structure I got a little concerned as to what could happen.

How can I provide a pricing structure that will fit into every situation? Say I charge 9 dollars a pane. Now what if they have french windows? My bidding process is way to complicated to be summerized into a small “proof” - and I’m not sure I want to share that information either.

SO I have been thinking of how I could make a safer offer.

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They have called me a couple times to sign up. After running the numbers this is not for us.

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I don’t like it… Even if I was just starting. I don’t see any customers that paid $49 being what I want my foundation built on. For me I’d rather have 1 correctly bid customer that will be with me for years, than twenty $49 customers that like paying 49 bucks. I don’t see this being anything more than a one time sale. Cheap sale at that.

Let’s look at the money part
[B]Scenerio 1[/B] - At $100 value I’m assuming you could do 5-6 of these jobs by yourself in one day. Making $125 to $150 for the day. Let’s look at two days.
$250 to $300 with a bunch of people who got a taste for paying $49 to have their windows cleaned (This by itself is horrible for your market, coupon or not)

[B]Scenerio 2 [/B] - I could spend the first of two days marketing/canvassing neighborhoods and realistically land 1 to 2 correctly bid jobs. We’ll call it 1.5 - We will also set the average job at $200 - Second day we will clean our newly aquired ideal (bid correctly) jobs. Cleaning 1.5 at $200 should take us appx 5 hours - earning appx $300 - What do you know, we still have 3 extra hours for more marketing…

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As far as other marketing: I’ve hit a directory of local churches and property managements - but unless they’re mega-churches it seems the average doesn’t have many windows, and property groups can be a hassle…

I’m looking into the rural route method of mass mailing, but there aren’t many in my area…at least within 30 minutes of my base.

Other wise I’ve just hit up the town with flyers and door-2-door commercial soliciting with moderate success.

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Groupon splits your payments into thirds (to cover they’re butt if you can’t follow through with the deal): the first payment is within the first 5 days, then 30 days, then 60 days.

They suggest that you multiply what you can handle in one month by 2.5. So if you can do 100 jobs, set the limit to be sold for 250.

The start-out number for the ‘deal is on’ was 35.

And you can setup any restrictions you want…even though you write it people still ask the same questions over and over…

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How so?